Procurement Strategies You Can Apply to Travel

by Direct Travel on 08/30/2018

Every year, GBTA Convention is a great place to learn, network and find new ways to gain more clarity in your travel program. Now that the largest annual gathering of business travel professionals in the world has come to a close, we want to share with you our notes from an insightful education session by our partner – OMNIA Partners.

The early morning session called “30 in 30: Procurement Strategies and Tips That Apply to Travel” quickly woke everyone up as OMNIA Partners discussed 30 great travel procurement tips in just 30 minutes. Below are just a few of those strategies.

Sourcing

Multi-Year Savings: When you negotiate contracts with travel suppliers, like airlines or car rental companies, your contracts are typically multiyear. Consider doing a multiyear savings look, since sometimes the focus is on the initial savings for the first year. Ask the suppliers to show you what the savings would look like in the second and third years, as well as what continuous improvements they are planning to make in order to reach those savings goals.

Technology Interface for End Users: When evaluating new technologies and looking at demos, make sure to ask about the interface for all users. It is as equally important for your end users − like travelers and travel arrangers − to have a great user experience in order to drive a high technology adoption rate, as it is for you to be able to successfully use the system.

Contracting

Selecting the Right SLAs: Work with your travel management company (TMC) to negotiate meaningful SLAs that make sense for your organization. Pick a few that are actionable and trackable; don’t choose too many so that it’s hard to keep track. For example, an annual traveler satisfaction survey is a standard SLA. If you have a lot of travelers that don’t travel often, it might make more sense to do a post-trip survey for them instead so they remember their experience better.

Supplier Contract Exclusions: Do your contract terms apply everywhere? In the travel industry, there are many alliances and franchise-based business models. Ask your travel suppliers for exclusion lists. Then evaluate how many transactions will occur in those locations and ask how they will honor the contract.

Implementation

Creative Communications: Collaborate with your marketing team and your TMC on creative ways to communicate to your travel stakeholders. For example, consider creating a shorter version of the travel policy in a form of an infographic that provides the most important elements of the travel policy in an easy-to-read visual format.

Measuring Success: How will you determine the success of the implementation process? Your TMC can help you determine different types of resources that are needed, integrate change management best practices, set up and track relevant metrics that measure the plan progress and ensure that implementation is on schedule and successful.

Savings

Measuring Cost Savings: Start the conversation with your TMC about the way you want to measure cost savings early on. This way when it’s time to do a travel review, you can get the most meaningful reports and gain valuable insights into your travel program performance. Do you want to see cost savings versus cost avoidance? What type of supplier-specific reports do you need to keep track of your performance against the contract goal?

Bleisure Travel Policy: With the rise of the bleisure travel trend, it’s a good time to evaluate how bleisure fits into your travel policy. The first step is to determine how many of your travelers are extending their business trips for leisure and how often. Then start asking questions like:

What expenses are covered?

How are employees indicating their business expenses vs. leisure expenses?

How can employees use your negotiated programs for leisure?

Can this help contribute to your overall volume for future negotiations?

Contract Management

Business Advancement Plan: When you meet with your TMC for a travel review, make sure to not only look at the travel performance of the previous time period, but also look at program improvements going forward. For example, if you have a specific cost driver that you want to address, ask your TMC to evaluate its current position, compare it to the industry benchmarks, provide several recommendations, determine the impact on the program, and estimate the cost of change and potential disruption to travel stakeholders.

Organizational Changes: There does not have to be a big change like a merger or acquisition to have a financial impact on your travel program. For example, let’s say you are opening a new location. Let your travel suppliers know in advance so you can work with them to determine a short-term change of volume, pricing, market share, and other items that might be impacted.

Want to learn about the other 20 tips and strategies you can apply to travel? Contact us today.

About OMNIA Partners

OMNIA Partners is a group purchasing organization that brings together industry-leading buying power and world-class vendors to offer an extensive portfolio of sourcing solutions and partnerships. As a preferred travel management supplier of OMNIA Partners, we work together to help their members drive savings to the bottom line and achieve sustainable travel program performance.